cost accounting quiz 2

In class recip

P1 =682,551 P2=1007449 Check =16900000

process cost systems are used in all of the following industries except:

home building

Abnormal spoilage is considered what kind of cost?

period cost

From the industries listed below, which one is most likely to use process costing in accounting for production costs?

steel mill

What is the final step in the process costing procedure for weighted average?

Assign Total Manufacturing Costs to Units Completed and Ending WIP.

Total cost of departments - design support

1,007,449

Place the following Process costing steps in the correct order:

1. Analyze flow of physical units, 2. Calculate equivalent units, 3. Determine the total costs to account for, 4. Compute unit costs, 5. Assign total manufacturing costs.

Lights Incorporated calculates cost for an equivalent unit of production using the FIFO method. Data for July: Work-in-process inventory, July 1 (36,000 units): Direct materials (100% completed) $ 122,400 Conversion (50% completed) 76,800 Balance in work in process inventory, July 1 $ 199,200 Units started during July 90,000Units completed and transferred 102,000 Work-in-process inventory, July 31: Direct materials (100% completed) 24,000 Conversion (50% completed) Cost incurred during July: Direct materials $ 180,000 Conversion costs 288,000 The cost of goods completed and transferred out under the weighted-average method is calculated to be:

1. Equivalent units for conversion under weighted average = 102,000 + (0.5 × 24,000) = 114,000 2. Conversion cost per EU under weighted average = ($76,800 + $288,000)/114,000 = $3.20 3. Materials cost per EU: (122,400 + 180,000)/126,000 = $2.40 4. Cost assigned: 102,000 × ($2.40 + $3.20) = $571,200

Hook Bait Incorporated processes king salmon for various distributors. Two departments are involved — processing and packaging. Data relating to tons of king salmon processed in the processing department during June 2020 are provided below: Tons material conversion Work-in-process inventory — June 1 1,500. 90 80 Work-in-process inventory — June 30. 2,800 60 40 Started processing during June 7,800 Total equivalent units for conversion under the FIFO method are calculated to be:

1. Units finished = 1,500 + 7,800 − 2,800 = 6,500 2. EUs = 6,500 + (0.4 × 2,800) − (0.8 × 1,500) = 6,420 6,420 EU

Hook Bait Incorporated processes king salmon for various distributors. Two departments are involved — processing and packaging. Data relating to tons of king salmon processed in the processing department during June 2020 are provided below: King Salmon PercentCompleted Tons material conversion Work-in-process inventory — June 1 1,500. 90 80 Work-in-process inventory — June 30. 2,800 60 40 Started processing during June 7,800 Total equivalent units for materials under the weighted-average method are calculated to be:

1. Units finished = 1,500 + 7,800 − 2,800 = 6,500 2. EUs = 6,500 + (0.6 × 2,800) = 8,180 8,180 equivalent units

Lights Incorporated calculates cost for an equivalent unit of production using the FIFO method. Data for July: Work-in-process inventory, July 1 (36,000 units): Direct materials (100% completed) $ 122,400 Conversion (50% completed) 76,800 Balance in work in process inventory, July 1 $ 199,200 Units started during July 90,000Units completed and transferred 102,000 Work-in-process inventory, July 31: Direct materials (100% completed) 24,000 Conversion (50% completed) Cost incurred during July: Direct materials $ 180,000 Conversion costs 288,000 Total equivalent units for conversion under the FIFO method are calculated to be:

102,000 + (24,000 × 0.5) − (36,000 × 0.5) = 96,000

Lights Incorporated calculates cost for an equivalent unit of production using the FIFO method. Data for July: Work-in-process inventory, July 1 (36,000 units): Direct materials (100% completed) $ 122,400 Conversion (50% completed) 76,800 Balance in work in process inventory, July 1 $ 199,200 Units started during July 90,000Units completed and transferred 102,000 Work-in-process inventory, July 31: Direct materials (100% completed) 24,000 Conversion (50% completed) Cost incurred during July: Direct materials $ 180,000 Conversion costs 288,000 Cost per equivalent unit for conversion under the FIFO method are calculated to be:

102,000 + (50/100 × 24,000) − (50/100 × 36,000) = 96,000 $288,000/96,000 = $3.00

Total cost-Marketing department

102,222

Total cost accumulated - accrual and rating

127,778

Place the following phases of the departmental approach in the correct order. 1.Allocate the production department costs to products. 2.Allocate service costs to the overhead costs. 3.Allocate the service department costs to the production department. 4.Trace all direct costs and allocate overhead costs to both the service and production departments.

4,3,1

The key difference between weighted-average and FIFO process costing methods is the handling of the partially completed:

Beginning work-in-process inventory.

Which method is (are) used to prepare the departmental production cost report when using a process cost system?

Both FIFO and weighted average are correct.

departmental approach

Classify manufacturing departments into production and service departments. Service departments do not directly make products or provide service to customers. They exist to facilitate production departments in manufacturing products or delivering service.

Which equation correctly calculates the total weighted average equivalent units of production?

Completed and transferred out units + Ending work-in-process equivalent units.

Factory overhead and direct labor costs are often combined and called:

Conversion Costs.

in a process costing system which assumes that normal spoilage occurs at the end of a process, the cost attributable to normal spoilage should be assigned to:

Cost of goods manufactured (transferred out).

In the computation of manufacturing cost per equivalent unit, the weighted-average method of process costing considers:

Current costs plus cost of beginning work-in-process inventory.

How is the department to be allocated first usually chosen in the step method?

It provides the highest percentage of service to other service departments.

In calculating unit cost in a process costing system, "conversion cost" is defined as the sum of:

Direct labor and factory overhead costs.

the number of the same or similar units that could have been produced given the amount of work actually performed on both complete and partially complete units is referred to as:

Equivalent units.

The direct method of departmental cost allocation is the simplest of the three methods because it:

Ignores the reciprocal flows.

The first-in, first out method is different from the weighted average method in what way?

It does not combine beginning inventory costs with current costs when computing equivalent unit costs.

The departmental approach of cost allocation recognizes that the typical manufacturing operation involves which type(s) of departments?

Service departments and production departments.

The mathematical technique that underlies the reciprocal cost allocation method is:

Simultaneous equations.

How are reciprocal flows determined?

Simultaneously in a system of equations.

What is the key implementation issue for cost allocation?

The choice of the most accurate allocation method.

The reciprocal method of departmental cost allocation is preferred over the step method because it takes into account all the reciprocal flows between:

The service departments.

The costs of work performed in the earlier departments that are transferred into the present department are called:

Transferred-in costs.

Process costing can be found in which of the following companies (industries)? Coca-Cola. Royal Dutch Shell Group (petroleum). Kimberly-Clark (paper products). Reichhold Chemical (chemicals). All of these answer choices are correct.

all of these are correct